Offshore Systems International Ltd. (TSX: OSI), a marine electronic
navigation company with a strong defense niche, today announced record
operating results for its three and nine month periods ended August 31,
2002.

"In addition to achieving our eleventh successive profitable
quarter we had strong revenue growth," said John Jacobson,
President and CEO Offshore Systems International. "New business,
including a major new order from the United States Coast Guard,
continued to flow as interest in our technology grew among navies around
the world."

Financial Highlights

During the fiscal third quarter of 2002, revenues increased 50% to
$2.7 million (US$1.7 million) compared to $1.8 million in the same
quarter last year. Net earnings increased to $536,535 or $0.02 per
diluted share, from $120,512, or $0.00 a diluted share, in the
year-earlier third quarter. All amounts are in Canadian dollars unless
otherwise specified.

For the first nine months of 2002, revenues were up 84% to $9.8
million (US$6.2 million) compared to $5.3 million for the nine months
ended August 31, 2001. Net earnings increased to $1.1 million or $0.04
per diluted share, from $144,100, or $0.01 a diluted share, in the first
nine months of fiscal 2001.

Offshore Systems' order backlog at the end of the fiscal 2002
third quarter was in excess of $5.7 million versus $4.9 million the year
earlier - an increase of 17%.

The Company's profitable growth helped to strengthen its
balance sheet during the quarter. At August 31, 2002, the Company had
working capital of $4.1 million compared to $2.8 million at November 30,
2001, OSI's year-end, including cash and cash equivalents of $2.2
million.

"Our cash position continues to strengthen, in fact, at the
end of September, our cash and equivalents was just under $4
million," said Mr. Jacobson. "This positive cash flow trend
allows us to confidently support our R&D activities and increase our
business development initiatives."

Operational Highlights

In June, 2002, the U.S. Coast Guard placed an order for $2.2
million for Offshore Systems' ECPINS(R)-M systems and upgrades. The
order represents follow-on business with the Coast Guard subsequent to
Offshore's ECPINS(R) systems being installed earlier in the year on
two of the Coast Guard's 'Polar-class' icebreakers.

In July 2002, the Company announced that it has received Type
Approval of its ECPINS(R) product line as an International Maritime
Organization standard Electronic Chart Display and Information Systems (ECDIS). The Type Approval was issued by the Federal Maritime and
Hydrographic Agency of Germany, one of a small number of testing
laboratories worldwide that are authorized to issue these
certifications.

In the same month the Company announced that it completed the
installation of its latest ECPINS-M system aboard Lockheed Martin's
Sea SLICE advanced technology demonstration vessel. Developed by the
United States Navy Office of Naval Research and the Naval Electronics
& Surveillance Systems division of Lockheed Martin, Sea SLICE
participated in the United States Navy's Fleet Battle Experiment -
Juliet. The U.S. Navy's Fleet Battle Experiments are
underway-exercises designed to evaluate new technology and new
operational concepts for future development and deployment.

The Company

Founded in 1977, Offshore Systems designs, develops and markets the
proprietary ECPINS(R) line of electronic chart navigation systems for
ships. ECPINS helps to reduce the risk of navigation-related incidents
by giving bridge crews a precise, real-time display of their position,
course and speed, against a background of fixed obstacles and other
navigational hazards. Offshore Systems has developed a strong market
position in military navigation, and has ECPINS systems deployed with
the United States Coast Guard, the Canadian Navy, the Royal Danish Navy and the United States Navy.

Information Concerning Forward-looking Statements

Statements in this News Release, to the extent not based on
historical events, constitute forward-looking statements.
Forward-looking statements include, without limitation, statements
evaluating market and general economic conditions in the preceding
sections, and statements regarding future-oriented costs and
expenditures. Investors are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's
analysis only as of the date thereof. These forward-looking statements
are subject to certain risks and uncertainties that could cause actual
results to differ materially. Such risks and uncertainties with respect
to the company include the effects of general economic conditions,
changing foreign exchange rates and actions by government authorities,
uncertainties associated with legal proceedings and negotiations,
industry supply levels, competitive pricing pressures and misjudgements
in the course of preparing forward-looking statements.